The Supreme Court could reject 26 million applications for student loan forgiveness

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Conservative Supreme Court justices took a predictably dim view Tuesday of President Joe Biden’s controversial plan to forgive up to $20,000 in federal student loans for some borrowers and wipe out nearly half a trillion in debt.

Biden announced the plan last August, just before the midterm elections. He faced mounting pressure from Democratic lawmakers who called on the president to take executive action as it became clear that Congress could not support a longer-term proposal.

Whether the debt cancellation helped Democrats outperform in this election is up for debate, but the plan’s one-sided politics was a key sticking point for Supreme Court justices who were skeptical of Biden’s authority to do things without approval of Congress.

RELATED: Excerpts from the arguments

One takeaway from Tuesday’s hearing that surprised me: Judge Amy Coney Barrett sounded like a potential blowout vote.

The oral arguments were in two cases challenging the program: one brought by a Republican-led group of states and the other by two people who did not qualify for the full benefits of the amnesty program. Many of the conservative justices dealt with fairness, executive overreach, and the mechanics of whether states could exercise their own will.

Why give borrowers this forgiveness instead of people who worked to pay off their debt early or couldn’t take on debt and dropped out of college?

These are valid questions, and the idea of ​​debt cancellation divides the country. In the national exit poll conducted for the 2022 midterm elections, 50% of midterm voters, mostly Democrats, approved of Biden’s debt relief plan and 47%, mostly Republicans, opposed.

In arguments on Tuesday, Justice Sonia Sotomayor was interested in the millions of people who could write off the debt could affect. Many of them did not have the same support lines during the pandemic that others did.

“They don’t have friends or families or others who can help them make these payments,” he said. Those borrowers will suffer in ways others won’t because of the pandemic, he said.

The most instructive story I read today about the underlying issue comes from CNN’s Elise Hammond, who digs into data to look at the problem of student debt.

More than $1.6 trillion is owed, he writes, a compound sum that has skyrocketed along with the cost of higher education.

Taking on debt is an investment, since graduates generally make more money than non-graduates. But debt can haunt people for decades. Almost a quarter of the debt is owed by people aged 50 and over.

Debt forgiveness is also an avenue to address racial inequality, as black graduates, in particular, tend to graduate with higher debt loads, making it harder for them to capitalize on their degree.

Biden’s proposal would be a big step, but it is less comprehensive than a program approved by Congress, and would take only a small part of the larger balance sheet and fail to address the core problem, which is the cost of college.

Biden was authorized until $10,000 in federal debt forgiveness for most beneficiaries borrowers and a total of up to $20,000 for borrowers who received a Pell Grant while enrolled in college – meaning the program focuses on lower-income people trying to break into the middle class.

The interest in forgiveness was remarkable:

  • More than 40 million borrowers are eligible.
  • So far 26 million have applied.
  • 16 million already have approved.

These are people from every part of the country, a point the White House tried to make when it released a list of candidates by congressional district.

Chief Justice John Roberts pointed out during arguments that something that would affect so many people and cost so much money should, to the casual observer, come from Congress.

“And if they haven’t acted on it, then maybe that’s a good lesson for the president or the administration bureaucracy that it’s not something they have to take on alone,” Roberts said.

The administration points to the 9/11 legislation they say allows the education secretary to assume great power during a national emergency, in this case the pandemic. But judges have recently been skeptical of Covid-related emergency arguments.

Regardless of what happens in court, a pandemic-related pause in federal student loan payments that has been in effect for nearly three years for all borrowers will end at some point. Time to start budgeting to pay them back long-term deferment of loan payments.

The Ministry of Education said that regardless of the court’s decision, the payments will resuming only 60 days after the last break ends on June 30, around the time the Supreme Court is expected to make its decision. This means loan payments could be due again at the end of August.

CNN’s Aileen Graef spoke to people with student debt who gathered outside the courthouse Tuesday and had this to say for CNN’s live story on the arguments:

Destiny Perryfirst-generation college student at Morgan State University in Baltimore, lives in a single-parent household of five.

“Right now, I have taken out a lot of loans. … I’m out here trying to get through college without having to stress about all the payments and everything,” Perry said.

Perry said she is exploring scholarship opportunities to offset the debt, but knows it won’t be enough to graduate debt-free.

Glenn Lopez, a freshman at Morgan State, described his student debt as a “creeping feeling.” He said he thinks about the debt “every two to three days.”

Representative Ayanna Pressley told CNN that he knows about student debt from a personal perspective.

“Well, what I’m sharing is a story that is definitely not an anomaly. This is a systemic crisis — a nearly $2 trillion crisis that is burning people from every walk of life,” said the Massachusetts Democrat.

“Like those millions of Black borrowers – I grew up in a single-parent household – and because of the financial pressure, I had no choice but to take out these loans. I eventually defaulted on those loans and did pay off those loans, but it took me 20 plus years to do so. And I was gainfully employed and often paycheck to paycheck and just couldn’t make ends meet. I just couldn’t move on,” he said.

Responding to opponents’ arguments that people should pay back the loans they take out, Pressley said “hardship is not a character flaw.”

“And despite the Herculean efforts of people to multitask, given the rising costs, people are treading water. They are treading water and we can do something to alleviate this burden and these difficulties,” he said.

There is a separate and extremely important question as to whether the six Republican states as well as the two borrowers they have “jurisdiction” to bring the cases – that is, the legal right to bring the disputes in the first place. In fact, residents of these states will benefit from the amnesty.

CNN legal analyst Steve Vladeck, a law professor at the University of Texas at Austin, told CNN’s Kate Bolduan that if the Supreme Court rules in the six red states, it has the potential to usher in a new era of legal challenges in which states they overload the legal system with challenges to all presidential actions.

“Does their hostility to this program lead them to actually weaken the historical boundaries of correctness?” That’s an issue the justices will have to deal with, according to Vladeck, arguing that they could also rule that this is a political issue that will be decided at the ballot box.

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